Explain the manner in which these items will affect the Person T’s AGI.

Question

Your qualitative answers should be written in full sentences with depth to your responses when needed. For questions and problems requiring computations, you need to share your supporting calculations. 1a. Jim files his return one month after the due date and pays the remaining $8,000 of tax owed by him. What are his delinquency penalties? 1b. Why is income-shifting considered such a major tax planning concept? 1c. Olivia is being audited by the IRS. The revenue agent determines that certain expenses that were deducted on her return are not valid, and he accordingly makes adjustments to her tax liability. Upon receipt of her 30-day letter, she phones you, a CPA, for advice regarding possible future action on the matter. What options would you discuss with Olivia? 1d. Compute the taxable income for 2020 under each of the following circumstances: Jim is married and files a joint return. Jim and his wife have two dependent children. They have adjusted gross income of $30,000 and…

Answer 1

Question

Chapter 6, Problem 40P

a.

To determine

Explain the manner in which these items will affect the Person T’s AGI.

b.

To determine

Calculate the amount of taxable income.

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Your qualitative answers should be written in full sentences with depth to your responses when needed. For questions and problems requiring computations, you need to share your supporting calculations. 1a. Jim files his return one month after the due date and pays the remaining $8,000 of tax owed by him. What are his delinquency penalties? 1b. Why is income-shifting considered such a major tax planning concept? 1c. Olivia is being audited by the IRS. The revenue agent determines that certain expenses that were deducted on her return are not valid, and he accordingly makes adjustments to her tax liability. Upon receipt of her 30-day letter, she phones you, a CPA, for advice regarding possible future action on the matter. What options would you discuss with Olivia? 1d. Compute the taxable income for 2020 under each of the following circumstances: Jim is married and files a joint return. Jim and his wife have two dependent children. They have adjusted gross income of $30,000 and…

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